Minimum Rates of Pay for Foreign Workers

Strong worker protection measures are in place to ensure that overseas workers are provided the same workplace rights and obligations as Australian citizens. These measures include establishing minimum rates of pay.

Foreign workers can only be employed in Australia if they hold a valid visa giving them permission to work. This includes working holiday makers like 417 visa holders, international students and subclass 457 visa holders. Employers must check that the overseas’s worker’s visa conditions allow them

For 457 visa holders, employers must show that the terms and conditions of employment are no less favourable than those they provide to Australian citizens or permanent residents doing similar work at the same place of work. In other words, 457 visa holders must be paid market salary rates by their employers and it is one of the conditions for sponsorship.

“The minimum rates of pay should reflect the market salary rate”

The minimum rates of pay should be in line with the award rate set out by the Fair Work Ombudsman – or reflect the market salary rate, regardless of whether the worker is an Australian citizen/permanent resident or a backpacker, a 457 visa holder or an international student.

Pay Awards (also known as ‘modern awards) are legal documents that outline the minimum pay rates and conditions of employment. There are 122 industry or occupation awards that cover most people who work in Australia.

The Fair Work Ombudsman has the Pay and Conditions Tool (PACT), which gives employers and employees information about pay rates. You can find the tool at calculate.fairwork.gov.au

In July 2016, a Korean migrant opened a restaurant in Melbourne without checking the wages applicable to his business. A Fair Work Ombudsman investigation found that four former employees – who were 417 working holiday visa holders– were under paid when they worked at the restaurant. The restaurant owner has now been required to back-pay more than $40,000 to four of his former staff.

“we place a high priority on ensuring their workplace rights are protected”

Meanwhile 7 Eleven has come under fire for underpaying foreign workers. Since the Fair Work Ombudsman was created in July, 2009, the Agency has placed eight matters involving 7-Eleven franchisees before the courts and recovered $625,000 for underpaid 7-Eleven employees.

“Overseas workers are often vulnerable because of a lack of awareness of their workplace rights and language barriers, so we place a high priority on ensuring their workplace rights are protected,” said Fair Work Ombudsman Natalie James.
“Successful compliance outcomes also help to ensure a level playing field for employers who are doing the right thing and complying with their obligations.”

Employers who are unsure about their obligations when employing foreign workers should seek advice. Australian Business Migration Group registered migration agent can advise employers on any questions they might have about engaging or sponsoring a foreign worker.